As filed with the Securities and Exchange Commission on March 17, 2000
Registration No. 333-14681
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
TO FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------
ION NETWORKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-2413505
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1551 South Washington Avenue 08854
Piscataway, New Jersey (Zip Code)
(Address of Principal Executive Offices)
1994 STOCK OPTION PLAN
(Full title of the plan)
Stephen B. Gray, President
Ion Networks, Inc.
1551 South Washington Avenue
Piscataway, New Jersey 08854
(Name and address of agent for service)
(732) 529-0100
(Telephone number, including area code, of agent for service)
with a copy to:
James Alterbaum, Esq.
Parker Chapin, LLP
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to time
after this Registration Statement becomes effective, as determined by market
conditions.
|_| If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.
|X| If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box.
|_| If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.
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<PAGE>
|_| If this Form is a post-effective amendment filed pursuant to rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.
---------------------
|_| If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
EXPLANATORY NOTE
-----------------------------------
The Prospectus filed as part of this Registration Statement has been prepared in
accordance with the requirements of Form S-3 pursuant to General Instruction C
of Form S-8 and may be used for reoffers or resales of Ion Networks, Inc.'s
common stock to be acquired by the persons named therein pursuant to Ion
Networks, Inc.'s 1994 Stock Option Plan.
<PAGE>
PROSPECTUS
ION NETWORKS, INC.
42,309 SHARES OF COMMON STOCK
-----------------------------------
o The shares of our common stock offered by this prospectus are being sold by
the selling stockholders.
o We will not receive any proceeds from the sale of these shares. Since all
of these shares are issuable upon exercise of options, we will receive
proceeds from the exercise of such options, and those proceeds, if any,
will be used for our general corporate purposes.
o On March 16, 2000, the closing price of our common stock on the Nasdaq
National Market was $33.125.
o Our executive offices are located at Washington Plaza, 1551 South
Washington Avenue, Piscataway, New Jersey 08854, our telephone number is
(732) 529-0100 and our website is at "www.ion-networks.com."
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NASDAQ National Market symbol for our Common Stock:
"IONN"
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THE SECURITIES OFFERED BY THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. YOU
SHOULD CAREFULLY CONSIDER THE FACTORS DESCRIBED UNDER THE HEADING "RISK FACTORS"
BEGINNING ON PAGE 7 OF THIS PROSPECTUS.
--------------------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
--------------------------------------------------
THE DATE OF THIS PROSPECTUS IS MARCH 17, 2000
<PAGE>
TABLE OF CONTENTS
Where You Can Find More Information About Us................................ 5
Incorporation of Certain Documents by Reference............................. 5
Risk associated with our securities.........................................12
Forward-Looking Statements..................................................13
Use of Proceeds.............................................................13
Dividend Policy.............................................................13
Selling Stockholders .......................................................14
Plan of Distribution .......................................................15
Description of Securities...................................................16
Indemnification for Securities Act Liabilities..............................17
Legal Matters...............................................................18
Experts ....................................................................18
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION ABOUT US
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to the public
over the Internet at the SEC's Website at "http://www.sec.gov."
We have filed with the SEC a registration statement on Form S-8 to
register the shares being offered. This Prospectus is part of that registration
statement and, as permitted by the SEC's rules, does not contain all the
information included in the registration statement. For further information with
respect to us and our common stock, you should refer to the registration
statement and to the exhibits and schedules filed as part of that registration
statement, as well as the documents we have incorporated by reference which are
discussed below. You can review and copy the registration statement, its
exhibits and schedules, as well as the documents we have incorporated by
reference, at the public reference facilities maintained by the SEC as described
above. The registration statement, including its exhibits and schedules, are
also available on the SEC's web site.
This Prospectus may contain summaries of contracts or other documents.
Because they are summaries, they will not contain all of the information that
may be important to you. If you would like complete information about a contract
or other document, you should read the copy filed as an exhibit to the
registration statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be a part of this Prospectus, and information that we file later
with the SEC will automatically update or supersede this information. We
incorporate by reference the documents listed below and any future filings we
will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934:
1. Annual Report on Form 10-KSB/A for the year ended March 31, 1999;
2. Quarterly Reports on Form 10-QSB for the quarters ended June 30, 1999,
September 30, 1999 and December 31, 1999;
3. The Company's Proxy Statement for the 1999 Annual Meeting of
Stockholders;
4. Current Report on Form 8-K dated (date of earliest event reported)
March 31, 1999 (as filed on April 9, 1999);
5. The Company's Registration Statement on Form S-8 filed with the SEC on
October 24, 1996.
6. The description of our Common Stock contained in the Registration
Statement on Form 8-A filed with the SEC on January 23, 1985.
You may request a copy of these filings, at no cost, by writing or
telephoning us at Washington Plaza, 1551 South Washington Avenue, Piscataway,
New Jersey 08854, telephone (732) 529-0100. Attention: Mr. Alfred M. Leonardi,
Chief Financial Officer.
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<PAGE>
------------------------------
This Prospectus contains certain forward-looking statements which
involve substantial risks and uncertainties. These forward-looking statements
can generally be identified because the context of the statement includes words
such as "may," "will," "expect," "anticipate," "intend," "estimate," "continue,"
"believe," or other similar words. Similarly, statements that describe our
future plans, objectives and goals are also forward-looking statements. Our
factual results, performance or achievements could differ materially from those
expressed or implied in these forward-looking statements as a result of certain
factors, including those listed in "Risk Factors" and elsewhere in this
Prospectus.
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR ANY OTHER PERSON TO
GIVE ANY INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS.
YOU MUST NOT RELY ON ANY UNAUTHORIZED INFORMATION. THIS PROSPECTUS DOES NOT
OFFER TO SELL OR BUY ANY SHARES IN ANY JURISDICTION WHERE IT IS UNLAWFUL. THE
INFORMATION IN THIS PROSPECTUS IS CURRENT AS OF MARCH 17, 2000.
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<PAGE>
RISK FACTORS
BEFORE YOU BUY SHARES OF OUR COMMON STOCK, YOU SHOULD BE AWARE THAT
THERE ARE VARIOUS RISKS ASSOCIATED WITH SUCH PURCHASE, INCLUDING THOSE DESCRIBED
BELOW. YOU SHOULD CONSIDER CAREFULLY THESE RISK FACTORS, TOGETHER WITH ALL OF
THE OTHER INFORMATION IN THIS PROSPECTUS, AND THE DOCUMENTS WE HAVE INCORPORATED
BY REFERENCE IN THE SECTION "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE"
BEFORE YOU DECIDE TO PURCHASE SHARES OF OUR COMMON STOCK.
RISKS ASSOCIATED WITH OUR BUSINESS
WE ARE VULNERABLE TO TECHNOLOGICAL CHANGES
The markets we serve experience rapid technological change, changing
customer requirements, frequent new product introductions and evolving industry
standards that may render existing products and services obsolete. As a result,
more advanced products produced by our competitors could erode our position in
our existing markets or other markets that we may enter. It is difficult to
estimate the life cycles of our products and services. Our future success will
depend, in part, upon our ability to enhance existing products and services and
to develop new products and services on a timely basis. In addition, our
products and services must keep pace with technological developments and we must
address increasingly sophisticated customer needs. We might experience
difficulties that could delay or prevent the successful development,
introduction and marketing of new products and services. New products and
services and enhancements might not meet the requirements of the marketplace and
achieve market acceptance. If these things happen, they would materially and
negatively affect our financial condition and results of operations.
WE CANNOT BE CERTAIN ABOUT OUR PRODUCT DEVELOPMENT
Our products are currently being used by a small number of customers
and there can be no assurance that the products will prove to be sufficiently
reliable in widespread commercial use. It is common for hardware and software as
complex and sophisticated as that incorporated in our products to experience
errors or "bugs" both during development and subsequent to commercial
introduction. We cannot assure you that all the potential problems will be
identified, that any bugs that are located can be corrected on a timely basis or
at all, or that additional errors will not be located in existing or future
products at a later time or when usage increases. Any such errors could delay
the commercial introduction or use of existing or new products and require
modifications in systems that have already been installed. Remedying such errors
has been and may continue to be costly and time consuming. Delays in debugging
or modifying our products could materially and adversely affect our competitive
position with respect to existing and new technologies and products offered by
our competitors.
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<PAGE>
THERE IS POTENTIAL FOR FLUCTUATION IN OUR QUARTERLY AND ANNUAL OPERATING RESULTS
In the past, we experienced fluctuations in our quarterly and annual
operating results and we anticipate that such fluctuations will continue and
could intensify. Our quarterly and annual operating results may vary
significantly depending on a number of factors, including:
o the timing of the introduction or acceptance of new products and
services;
o changes in the mix of products and services provided;
o long sales cycles;
o changes in regulations affecting our business;
o amount of research and development expenditures necessary for new
product development and innovation;
o changes in our operating expenses;
o uneven revenue streams; and
o general economic conditions.
Revenue recognition for our products is based upon various performance criteria
and varies from customer to customer and product to product. We cannot assure
you that our levels of profitability will not vary significantly among quarterly
periods or that in future quarterly periods our results of operations will not
be below prior results or the expectations of public market analysts and
investors. If this occurs, the price of our common stock could significantly
decrease.
WE CANNOT BE CERTAIN THAT OUR PRODUCTS IN DEVELOPMENT WILL EVER BECOME
COMMERCIALLY VIABLE
We have a variety of products that are in the research and development
stage, including certain incomplete products that we purchased from SolCom
Systems Limited when we acquired SolCom in March 1999. These products have not
yet met technological feasibility and therefore do not contribute to our
revenue. If, as a result of the uncertainties surrounding the successful
completion of these projects, we are unable to establish technological
feasibility and are unable to produce commercially viable products, the
anticipated future revenue attributable to the expected sales and profits from
such products will not be realized. This would have a significant negative
effect on our future financial condition, results of operations and cash flows.
WE HAVE SIGNIFICANT COMPETITION
We are subject to significant competition from different sources for
our different products and services. We can not assure you that the market will
continue to accept our hardware and software technology or that we will be able
to compete successfully in the future. We believe that the main factors
affecting competition in the network management business are:
o the products' ability to meet various network management and security
requirements;
o the products' ability to conform to the network and/or computer
systems;
o the products' ability to avoid becoming technologically outdated;
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<PAGE>
o the willingness and the ability of distributors to provide support
customization, training and installation; and
o the price.
Although we believe that our present products and services are competitive, we
compete with a number of large computer, electronics and telecommunications
manufacturers which have financial, research and development, marketing and
technical resources far greater than ours. Our competitors include Net Scout
Inc., Hewlett-Packard, Inc., 3Com Corp., Technically Elite, Inc., Bay Networks
Inc., Shomiti Systems Inc., Visual Networks, Inc., Concord Communications, Inc.
and Sync Research, Inc. Such companies may succeed in producing and distributing
competitive products more effectively than we can produce and distribute our
products, and may also develop new products which compete effectively with our
products.
WE MAY BE UNABLE TO PROTECT OUR PROPRIETARY RIGHTS, PERMITTING COMPETITORS TO
DUPLICATE OUR PRODUCTS AND SERVICES
We hold no patents on any of our technology. Although we do license
some of our technology from third parties, we do not consider any of these
licenses to be material to our operations. We have made a consistent effort to
minimize the ability of competitors to duplicate our software technology
utilized in our products. However, there remains the possibility of duplication
of our products, and competing products have already been introduced. Any such
duplication by our competitors could negatively impact on our business and
operations.
WE RELY ON SEVERAL KEY CUSTOMERS FOR A SIGNIFICANT PORTION OF OUR BUSINESS
Our business is dependent to a great extent on several key customer
relationships, including PTT Holland (KPN), Lucent Technologies, AT&T, RHYTHMS
NetConnections and MCI WorldCom. Our sales to these customers represented
approximately 61% of our revenue for the fiscal year 1999. We also have
significant "original equipment manufacturer" relationships with Lucent
Technologies and Hewlett-Packard, Inc., which accounted for approximately 21% of
our revenues for fiscal year 1999. In addition, as a result of our recent
acquisitions of SolCom and certain of the operating assets of LeeMAH DataCom
Security Corporation, we have established new customer relationships with
Hewlett-Packard, Inc., Siemens Corporation and BellSouth. The loss of any of
these customers would likely significantly decrease our revenues and future
prospects.
WE DEPEND UPON KEY MEMBERS OF OUR EMPLOYEES AND MANAGEMENT
Our business is greatly dependent on the efforts of our executive
officers and key employees, and on our ability to attract key personnel. Our
success depends in large part on the continued services of our key management,
sales, engineering, research and development and operational personnel and on
our ability to continue to attract, motivate and retain highly qualified
employees and independent contractors in those areas. Competition for such
personnel is intense and we cannot assure you that we will successfully
attract, motivate and retain key personnel. The inability to hire and retain
qualified personnel or the loss of the services of key personnel could have a
material adverse effect upon our business, financial condition and results
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of operations. Currently, we do not maintain "key man" insurance policies with
respect to any of our employees.
WE MAY HAVE DIFFICULTY COMPLYING WITH GOVERNMENT REGULATION
Due to the sophistication of the technology employed in our devices,
export of our products is subject to governmental regulation. As required by law
or demanded by customer contract, we routinely obtain approval of our products
by Underwriters' Laboratories. Additionally, because many of our products
interface with telecommunications networks, our products are subject to several
key Federal Communications Commission ("FCC") rules and thus FCC approval is
necessary as well.
Part 68 of the FCC rules contains the majority of the technical
requirements with which telephone systems must comply to qualify for FCC
registration for interconnection to the public telephone network. Part 68
registration represents a determination by the FCC that telecommunication
equipment interfacing with the public telephone network complies with certain
interference parameters and we intend to apply for FCC Part 68 registration for
all of our new products.
Part 15 of the FCC rules requires equipment classified as containing a
Class A computing device to meet certain radio and television interference
requirements, especially as such requirements relate to operations of such
equipment in a residential area.
Certain of our products are subject to Part 15.
The European Community is developing a similar set of requirements for
its members and we have begun the process of compliance for Europe.
RISKS RELATING TO THE YEAR 2000 ISSUE
Many currently installed computer systems and software products accept
only two digit codes to define a specific year. Computer equipment and software
with embedded technology which are time-sensitive may recognize the two digit
date code "00" as the year 1900 rather than the year 2000, resulting in system
failure or miscalculations. This problem is generally referred to as the "Year
2000 issue". We use software and related technologies that will be affected by
the "Year 2000 issue." We began the process of identifying the changes required
to our computer programs and hardware during 1996. We believe that all of our
major programs and hardware are Year 2000 compliant. However, we cannot assure
you that other companies' computer systems and applications on which our
operations rely will be timely converted, or that any such failure to convert by
another company would not have a material negative effect on our systems and
operations. Furthermore, there can be no assurance that the software that we use
which has been designed to be Year 2000 compliant, contains all necessary date
code changes.
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THERE ARE LIMITATIONS ON THE LIABILITY OF OUR DIRECTORS AND OFFICERS
Our Certificate of Incorporation, as amended, and our Bylaws contain
provisions limiting the liability of our directors for monetary damages to the
fullest extent permissible under Delaware law. This is intended to eliminate the
personal liability of a director for monetary damages on an action brought by or
in our right for breach of a director's duties to us or to our stockholders
except in certain limited circumstances. In addition, our Certificate of
Incorporation, as amended, and our Bylaws contain provisions requiring us to
indemnify our directors, officers, employees and agents serving at our request,
against expenses, judgments (including derivative actions), fines and amounts
paid in settlement. This indemnification is limited to actions taken in good
faith in the reasonable belief that the conduct was lawful and in or not opposed
to our best interests. The Certificate of Incorporation and the Bylaws provide
for the indemnification of directors and officers in connection with civil,
criminal, administrative or investigative proceedings when acting in their
capacities as agents for us. These provisions may reduce the likelihood of
derivative litigation against directors and executive officers and may
discourage or deter stockholders or management from suing directors or executive
officers for breaches of their fiduciary duties, even though such an action, if
successful, might otherwise benefit us and our stockholders.
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RISKS ASSOCIATED WITH OUR SECURITIES
WE DO NOT ANTICIPATE THE PAYMENT OF DIVIDENDS
We have never declared or paid cash dividends on our common stock. We
currently anticipate that we will retain all available funds for use in the
operation of our business. Thus, we do not anticipate paying any cash dividends
on our common stock in the foreseeable future.
THERE IS POTENTIAL FOR FLUCTUATION IN THE MARKET PRICE OF OUR SECURITIES
Because of the nature of the industry in which we operate, the market
price of our securities is highly volatile. Factors such as announcements by us
or others of technological innovations, new commercial products, regulatory
approvals or proprietary rights developments, and competitive developments all
may have a significant impact on our future business prospects and market price
of our securities.
WE MAY NEED TO RAISE MORE MONEY IN THE FUTURE
We may need to seek additional financing in the future as a result of a
variety of factors, including in the event of unanticipated technical or other
problems. We cannot assure you that additional financing will be available to us
on acceptable terms or at all. If we are not able to secure additional financing
on terms that we consider acceptable to us, our business may be negatively
impacted and we may not be able to expand, take advantage of opportunities in
the marketplace or respond effectively to competitive pressures.
SHARES THAT ARE ELIGIBLE FOR SALE IN THE FUTURE MAY AFFECT THE MARKET PRICE OF
OUR COMMON STOCK
As of February 28, 2000, an aggregate of 2,122,705 of the outstanding
shares of our common stock are "restricted securities" as that term is defined
in Rule 144 under the federal securities laws. These restricted shares may be
sold pursuant only to an effective registration statement under the securities
laws or in compliance with the exemption provisions of Rule 144 or other
securities law provisions. Rule 144 permits sales of restricted securities by
any person (whether or not an affiliate) after one year, at which time sales can
be made subject to the Rule's existing volume and other limitations. Rule 144
also permits sales of restricted securities by non-affiliates without adhering
to Rule 144's existing volume or other limitations after two years. In general,
an "affiliate" is a person with the power to manage and direct our policies. The
SEC has stated that generally, executive officers and directors of an entity are
deemed affiliates of the entity. In addition, 1,356,462 shares are issuable
pursuant to currently exercisable options, and 808,537 shares are issuable
pursuant to currently exercisable warrants, which may be exercised for shares
that may be restricted or registered, further adding to the number of
outstanding shares. Future sales of substantial amounts of shares in the public
market, or the perception that such sales could occur, could negatively affect
the price of our common stock.
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FORWARD - LOOKING STATEMENTS
In this prospectus, we make statements about our future financial
condition, results of operations and business. These are based on estimates and
assumptions made from information currently available to us. Although we believe
these estimates and assumptions are reasonable, they are uncertain. These
forward-looking statements can generally be identified because the context of
the statement includes words such as may, will, expect, anticipate, intend,
estimate, continue, believe or other similar words. Similarly, statements that
describe our future expectations, objectives and goals or contain projections of
our future results of operations or financial condition are also forward-looking
statements. Our future results, performance or achievements could differ
materially from those expressed or implied in these forward-looking statements,
including those listed under the heading "Risk Factors" and other cautionary
statements in this prospectus. Unless otherwise required by applicable
securities laws, we assume no obligation to update any such forward-looking
statements, or to update the reasons why actual results could differ from those
projected in the forward-looking statements.
USE OF PROCEEDS
The Selling Stockholders are selling all of the shares covered by this
Prospectus for their own account. Accordingly, we will not receive any of the
proceeds from the resale of the shares. We will receive proceeds from the
exercise of the options, which results in the issuance of the shares registered
under this registration statement. We will use such net proceeds, if any, for
general corporate purposes and working capital. We have agreed to bear the
expenses relating to the registration of the shares, other than brokerage
commissions and expenses, if any, which will be paid by the Selling
Stockholders.
DIVIDEND POLICY
We have never declared or paid cash dividends on our common stock. We
currently anticipate that we will retain all available funds for use in the
operation of our business. As such, we do not anticipate paying any cash
dividends on our common stock in the foreseeable future.
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SELLING STOCKHOLDERS
We issued securities exercisable for the shares covered by this
Prospectus to the Selling Stockholder in connection with the 1994 Plan, approved
by the Board of Directors and Shareholders of Ion Networks, Inc., and
incorporated herein by reference to our Registration Statement on Form S-8, as
filed on October 24, 1996. The shares underlying such securities were registered
under the Securities Act of 1933 on our Form S-8, filed with the Commission on
October 24, 1996.
The following table lists certain information regarding the Selling
Stockholder's ownership of shares of Common Stock as of February 28, 2000, and
as adjusted to reflect the sale of the shares registered hereby. Information
concerning the Selling Stockholders may change from time to time. The
information in the table concerning the Selling Stockholder who may offer Shares
hereunder from time to time is based on information provided to us by such
stockholders, except for the assumed exercise of the options which is based
solely on the assumptions referenced in footnotes (1) and (3) to the table.
<TABLE>
<CAPTION>
Shares of Shares of Common Stock
Common Shares of Owned
Stock Owned Common after Offering (1)
Name of Selling Prior to Stock to be -------------------------------------
Stockholder Offering Sold (3) Number Percent
------------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Stephen B. Gray 710,275(2) 42,309 667,966 4.4%
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</TABLE>
(1) Assumes that all of the shares of Common Stock offered hereby are sold and
assumes total outstanding shares of Common Stock of 14,395,344.
(2) Consists of options to purchase 710,275 shares of the Company's Common
Stock.
(3) Assumes that the Selling Stockholder will exercise options for all shares
registered hereunder.
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PLAN OF DISTRIBUTION
The Selling Stockholder may offer his shares of Common Stock at various
times in one or more of the following transactions:
o on any U.S. securities exchange on which the Common Stock may be
listed at the time of such sale;
o in the over-the-counter market;
o in transactions other than on such exchanges or in the
over-the-counter market;
o in connection with short sales;
o in a combination of any of the above transactions.
The Selling Stockholder may offer his shares of Common Stock at
prevailing market prices at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices.
The Selling Stockholder may use broker-dealers to sell his shares of
Common Stock. If this happens, broker-dealers will either receive discounts or
commissions from the Selling Stockholder, or they will receive commissions from
purchasers of shares of Common Stock for whom they acted as agents. Such brokers
may act as dealers by purchasing any and all of the Shares covered by this
Prospectus either as agents for others or as principals for their own accounts
and reselling such securities pursuant to this Prospectus.
The Selling Stockholder and any broker-dealers or other persons acting
on the behalf of parties that participate in the distribution of the shares may
be deemed to be underwriters. As such, any commissions or profits they receive
on the resale of the shares may be deemed to be underwriting discounts and
commissions under the Securities Act.
As of the date of this Prospectus, the Company is not aware of any
agreement, arrangement or understanding between any broker or dealer and the
Selling Stockholder with respect to the offer or sale of Shares pursuant to this
Prospectus.
To the extent required under the Securities Act, the Company will file
a supplemental prospectus to disclose (a) the name of any such broker-dealers,
(b) the number of Shares involved, (c) the price at which such Shares are to be
sold, (d) the commissions paid or discounts or concessions allowed to such
broker-dealers, where applicable, (e) that such broker-dealers did not conduct
any investigation to verify the information set out in this Prospectus, as
supplemented, and (f) other facts material to the transaction.
The Selling Stockholder is selling all of the shares covered by this
Prospectus for his own account. Accordingly, the Company will not receive any
proceeds from the resale of these shares. The Company may receive proceeds from
the exercise of the options, which results in the issuance of the Shares
registered under the registration statement. The Company anticipates using such
net proceeds, if any, for general corporate purposes.
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DESCRIPTION OF SECURITIES
GENERAL
The total amount of authorized capital stock of the Company consists of
50,000,000 shares of common stock, par value $.001 per share (the "Common
Stock"), and 1,000,000 shares of preferred stock, par value $.001 per share (the
"Preferred Stock"). As of February 28, 2000, there were 14,395,344 shares of
Common Stock issued and outstanding and no shares of Preferred Stock issued and
outstanding.
COMMON STOCK
Holders of shares of Common Stock are entitled to one vote per share on
all matters that are submitted to the stockholders for their approval and have
no cumulative voting rights. The holders of the Common Stock are entitled to
receive dividends, if any, as may be declared by the Board of Directors from
funds legally available from time to time for this purpose. Upon liquidation or
dissolution of the Company, the remainder of the Company's assets will be
distributed ratably among the holders of Common Stock, after the payment of all
liabilities and payment to the holders of any Preferred Stock. All of the
outstanding shares of Common Stock are fully-paid and non-assessable.
PREFERRED STOCK
The Company's Preferred Stock may be issued from time to time by the
Company's Board of Directors without the approval of the Company's stockholders.
The Board of Directors is authorized to issue these shares in different classes
and series and, with respect to each class or series, to determine the dividend
rights, the redemption provisions, conversion provisions, liquidation
preferences and other rights and preferences not in conflict with the Company's
Certificate of Incorporation or with Delaware law.
TRANSFER AGENT AND WARRANT AGENT
American Stock Transfer & Trust Company, New York, New York is the
transfer agent and registrar for the Common Stock.
DELAWARE TAKEOVER STATUTE AND CERTAIN CHARTER PROVISIONS
The Company is subject to Section 203 of the Delaware General
Corporation Law which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any business combination with any interested
stockholder for a period of three years following the date that such stockholder
became an interested stockholder, unless: (i) prior to such date, the Board of
Directors of the corporation approved either the business combination or the
transaction which resulted in the stockholder becoming an interested
stockholder; (ii) upon consummation of the transaction which resulted in the
stockholder becoming an interested stockholder, the interested stockholder owned
at least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding for purposes of determining the number of
shares outstanding
-16-
<PAGE>
those shares owned (x) by persons who are directors and also officers and (y) by
employee stock plans in which employee participants do not have the right to
determine confidentially whether shares held subject to the plan will be
tendered in a tender or exchange offer; or (iii) on or subsequent to such date,
the business combination is approved by the Board of Directors and authorized at
an annual or special meeting of stockholders, and not by written consent, by the
affirmative vote of at least 66 2/3% of the outstanding voting stock which is
not owned by the interested stockholder.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Section 145 of the Delaware General Corporation Law provides, in
general, that a corporation incorporated under the laws of the State of
Delaware, such as the Company, may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (other than a derivative action by or in the right of the
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by such person in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner such person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe such person's conduct was
unlawful. In the case of a derivative action, a Delaware corporation may
indemnify any such person against expenses (including attorneys' fees) actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in good faith and in a
manner such person reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery of the State of Delaware or any other court in which such
action was brought determines such person is fairly and reasonably entitled to
indemnity for such expenses.
The Certificate of Incorporation, as amended, provides that the
liability of the Company's directors shall be limited to the fullest extent
permitted by the Delaware General Corporation Law. In addition, the Certificate
of Incorporation provides that the Company shall indemnify directors, officers,
employees and agents of the Company acting in such capacity to the fullest
extent permitted by such law.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the small
business issuer pursuant to the foregoing provisions, or otherwise, the small
business issuer has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable.
-17-
<PAGE>
LEGAL MATTERS
The validity of the securities being offered hereby was passed upon by
Parker Chapin, LLP, New York, New York.
EXPERTS
The consolidated financial statements of ION Networks, Inc.
incorporated in this Prospectus by reference to the Company's Annual Report on
Form 10-KSB/A for the year ended March 31, 1999, have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
-18-
<PAGE>
<TABLE>
<CAPTION>
-------------------------------------------------- ------------------------------
<S> <C>
WE HAVE NOT AUTHORIZED ANY DEALER,
SALESPERSON OR ANY OTHER PERSON TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT
CONTAINED IN THIS PROSPECTUS. YOU MUST NOT ION NETWORKS, INC.
RELY ON ANY UNAUTHORIZED INFORMATION.
THIS PROSPECTUS DOES NOT OFFER TO SELL OR
BUY ANY SHARES IN ANY JURISDICTION WHERE IT IS
UNLAWFUL. THE INFORMATION IN THIS
PROSPECTUS IS CURRENT AS OF MARCH 17, 2000. 42,309 SHARES OF
COMMON STOCK
TABLE OF CONTENTS
Page
----
Where You Can Find More Information About Us...... 5
Incorporation of Certain Documents by Reference... 5
Risk Factors...................................... 7
Forward-Looking Statements........................13
Use of Proceeds...................................13
Dividend Policy...................................13
Selling Stockholders .............................14
Description of Securities.........................15
Plan of Distribution .............................16
Indemnification for Securities Act Liabilities....17 PROSPECTUS
Legal Matters.....................................18
Experts ..........................................18
March 17, 2000
-------------------------------------------------- ------------------------------
</TABLE>
<PAGE>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
Disclosed in Prospectus under "Where You Can Find More
information About Us."
ITEM 4. DESCRIPTION OF SECURITIES.
Disclosed in Prospectus under same title.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Disclosed in Prospectus under same title.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not Applicable.
<PAGE>
ITEM 8. EXHIBITS.
Exhibit
Number Description
- ------ -----------
3.1 Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware on August 5, 1998.(1)
3.2 Certificate of Amendment of the Certificate of Incorporation, as filed
with the Secretary of State of the State of Delaware on December 11,
1998.(1)
3.3 Certificate of Amendment of the Certificate of Incorporation, as filed
with the Secretary of State of the State of Delaware on October 12,
1999.*
3.4 By-Laws of the Company.(1)
4.1 Registrant's 1994 Stock Option Plan.(2)
5.1 Opinion of Parker Chapin, LLP as to the legality of the Common Stock
being offered and consent.(3)
23.1 Consent of PricewaterhouseCoopers LLP.*
23.2 Consent of Parker Chapin, LLP.*
24.1 Powers of Attorney of certain officers and directors of the registrant
(included in signature page).
- -------------------------------
*Filed herewith
(1) Incorporated by reference to the Company's Registration Statement on
Form S-8 filed on April 22, 1999.
(2) Incorporated by reference to the Company's Proxy Statement dated August
15, 1994.
(3) Incorporated by reference to the Company's Registration Statement on
Form S-8 filed on October 24, 1996.
<PAGE>
ITEM 9. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item 6
above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses
<PAGE>
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing a post-effective amendment to Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Town of Piscataway, State of New
Jersey, on the 14th day of March, 2000.
ION NETWORKS, INC.
By: /s/ Stephen B. Gray
--------------------------
Stephen B. Gray, President
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints each of Stephen B. Gray and Alfred M.
Leonardi and each of them with power of substitution, as his attorney-in-fact,
in all capacities, to sign any amendments to this registration statement
(including post-effective amendments) and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, hereby ratifying and confirming all that said
attorney-in-facts or their substitutes may do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on the 14th day of March, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Stephen B. Gray
- ----------------------------------- President, Chief Executive Officer,
Stephen B. Gray Chief Operating Officer and Director
/s/ Stephen M. Deixler
- ----------------------------------- Chairman of the Board of Directors
Stephen M. Deixler
/s/ Alfred M. Leonardi
- ----------------------------------- Chief Financial Officer and Treasurer
Alfred M. Leonardi (Principal Financial Officer and Principal
Accounting Officer)
/s/ Alexander C. Stark
- -----------------------------------
Alexander C. Stark Director
/s/ Martin Ritchie
- -----------------------------------
Martin Ritchie Director
/s/ Alan Hardie
- -----------------------------------
Alan Hardie Director
- -----------------------------------
Baruch Halpern Director
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
- ------ -----------
3.1 Certificate of Incorporation of the Company, as filed with the
Secretary of State of the State of Delaware on August 5, 1998.(1)
3.2 Certificate of Amendment of the Certificate of Incorporation, as filed
with the Secretary of State of the State of Delaware on December 11,
1998.(1)
3.3 Certificate of Amendment of the Certificate of Incorporation, as filed
with the Secretary of State of the State of Delaware on October 12,
1999.*
3.4 By-Laws of the Company.(1)
4.1 Registrant's 1994 Stock Option Plan.(2)
5.1 Opinion of Parker Chapin, LLP as to the legality of the Common Stock
being offered and consent.(3)
23.1 Consent of PricewaterhouseCoopers LLP.*
23.2 Consent of Parker Chapin, LLP.*
24.1 Powers of Attorney of certain officers and directors of the registrant
(included in signature page).
- -------------------------------
*Filed herewith
(1) Incorporated by reference to the Company's Registration Statement on
Form S-8 filed on April 22, 1999.
(2) Incorporated by reference to the Company's Proxy Statement dated August
15, 1994.
(3) Incorporated by reference to the Company's Registration Statement on
Form S-8 filed on October 24, 1996.
EXHIBIT 3.3
-----------
CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
ION NETWORKS, INC.
Pursuant to Section 242 of the General Corporation Law of the State of
Delaware, the undersigned, Stephen B. Gray, the President and Chief Executive
Officer of Ion Networks, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware, DOES HEREBY
CERTIFY:
FIRST: That the name of the Corporation is ION NETWORKS, INC.
(hereinafter, the "Corporation");
SECOND: That the Certificate of Incorporation of the Corporation is
hereby amended by striking out Article FOURTH thereof and by substituting in
lieu of said Article the following new Article FOURTH:
"FOURTH: The Corporation is authorized to issue two classes of
shares designated common stock ("Common Stock") and preferred
stock ("Preferred Stock"), respectively. The number of shares
of Common Stock authorized to be issued is 50,000,000, with a
par value of $.001 per share, and the number of shares of
Preferred Stock authorized to be issued is 1,000,000, with a
par value of $.001 per share. Shares of Common Stock or
Preferred Stock that are redeemed, purchased or otherwise
acquired by the Corporation may be reissued except as
otherwise provided by law.
<PAGE>
Preferred Stock. Shares of Preferred Stock may be issued from
time to time in one or more series as may from time to time be
determined by the Board of Directors, each of said series to
be distinctly designated. The designations, number, voting
powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations or
restrictions thereof, if any, of each such series may differ
from those of any and all other series of Preferred Stock at
any time outstanding, and the Board of Directors is hereby
expressly granted authority to fix or alter, by resolution or
resolutions, and to file a certificate pursuant to the
applicable law of the State of Delaware (hereinafter referred
to as a "Certificate of Designation"), the designation,
number, voting powers, preferences and relative,
participating, optional and other special rights, and the
qualifications, limitations and restrictions thereof, of each
such series, including, but without limiting the generality of
the foregoing, the following:
(i) The distinctive designation of, and the number of shares
of Preferred Stock that shall constitute, such series, which
number (except where otherwise provided by the Board of
Directors in the resolution establishing such series) may be
increased or decreased (but not below the number of shares of
such series then outstanding) from time to time by like action
of the Board of Directors;
(ii) The rights in respect of dividends, if any, of such
series of Preferred Stock, the extent of the preference or
relation, if any, of such dividends to the dividends payable
on any other class or classes or on any other series of the
same or other class or classes of capital stock of the
Corporation and whether such dividends shall be cumulative or
noncumulative;
(iii) The right, if any, of the holders of such series of
Preferred Stock to convert the same into, or exchange the same
for, shares of any other class or classes or of any other
series of the same or any other class or classes of capital
stock of the Corporation, and the terms and conditions of such
conversion or exchange;
(iv) Whether or not shares of such series of Preferred Stock
shall be subject to redemption, and the redemption price or
prices and the time or time at which, and the terms and
conditions on which, shares of such series of Preferred Stock
may be redeemed;
(v) The rights, if any, of the holders of such series of
Preferred Stock upon the voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation or in the event
of any merger or consolidation of or sale of assets by the
Corporation;
2
<PAGE>
(vi) The voting powers, if any, of the holders of any series
of Preferred Stock generally or with respect to any particular
matter, which may be less than, equal to or greater than one
vote per share; and
(vii) Such other powers, preferences and relative,
participating, optional and other special rights, and the
qualifications, limitations and restrictions thereof, as the
Board of Directors shall determine."
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, said Board of Directors of Ion Networks, Inc. has
caused this Certificate to be signed by its Chief Executive Officer and
President, Stephen B. Gray, and attested to by Kenneth G. Hay, its Chief
Financial Officer, this 12th day of October, 1999.
ION NETWORKS, INC.
By: /s/ Stephen B. Gray
-----------------------
Stephen B. Gray,
Chief Executive Officer and President
Attest:
/s/ Kenneth G. Hay
- -----------------------
Kenneth G. Hay,
Chief Financial Officer
3
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Post-Effective
Amendment No. 1 to Form S-8 Registration Statement (No. 333-14681) of Ion
Networks, Inc. of our report dated July 12, 1999, relating to the consolidated
financial statements appearing in Ion Networks, Inc. Annual Report on Form
10-KSB/A for the year ended March 31, 1999. We also consent to the reference to
us under the heading "Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers, LLP
- -------------------------------------
PricewaterhouseCoopers, LLP
New York, New York
March 16, 2000
EXHIBIT 23.2
------------
CONSENT OF ATTORNEYS
[Letterhead of Parker Chapin, LLP]
March 16, 2000
Ion Networks, Inc.
1551 South Washington Avenue
Piscataway, New Jersey 08854
Dear Sirs:
We have acted as counsel to Ion Networks, Inc., a Delaware corporation
(the "Company"), in connection with its filing of a post-effective amendment to
its registration statement on Form S-8, Registration No. 333-14681 (the
"Registration Statement") being filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, relating to an offering
of an aggregate of 42,309 shares of common stock, par value $.001 per share (the
"Common Stock").
We hereby consent to the filing of this consent as an exhibit to the
Registration Statement and to the reference made to us under the caption "Legal
Matters" in the prospectus constituting part of the Registration Statement.
Very truly yours,
/s/ Parker Chapin LLP
PARKER CHAPIN LLP
